Precision Air plans IPO for late 2010


(eTN) Tanzania’s premier privately-owned airline, Precision Air, will issue an initial public offering (IPO) of new shares later this year, aimed to increase capitalization and bring institutional and private investors from Tanzania on board. Presently, Kenya Airways (KQ) holds 49 percent of the issued shares in the company, and it is expected that – should the offer be taken up by the market as expected – this ratio may reduce to somewhere in the mid 30 percent margin. Kenya Airways itself is a publicly-traded company on the East African stock and security exchanges and the arrival on the stock market by Precision Air is another sign that airlines, well-run airlines that is, can indeed make an economic success of their business in spite of challenging conditions in their country and in global terms.

Precision Air has in recent years embarked on a progressive fleet renewal and expansion, mainly using the French-built ATR series and also added jet aircraft to offer destinations further abroad. The company has all but supplanted Air Tanzania (ATC) as a de facto national airline, as ATC is at the verge of going under, in spite of the occasional half-hearted efforts by government to keep the airline afloat. Precision is now flying a more extensive network than ATC has ever done in the past, carries more passengers and operates more aircraft, and really is the only choice for Tanzanians to reliably travel by air to the places they want to fly to.

Offering shares to the public will further underscore the standing Precision has achieved in recent years, respected by the aviation sector and appreciated to the point of being selected as Tanzania’s most respected company in past years. The company has been airborne for over 16 years and has been a partner of Kenya Airways for the past 7 years, bringing mutual benefits for both companies. Jealous competitors and detractors on the political front have in the past, however, used the association with KQ to brand Precision a Kenyan airline, conveniently ignoring the fact that majority shares are held by a Tanzanian aviator and playing on cheap sentiments often used by the less successful to swing a little something their way.

Only a few days ago, the matter of ATC’s revival was again raised in parliament, but the comments made displayed an acute lack of understanding of the internal workings of the aviation industry, while the figures thrown around – over US$500 million were pegged for the revival of the erstwhile national carrier – frankly looked beyond government’s means and pockets. Other claims said “tourism was suffering” because of ATC’s well near demise, again conveniently forgetting the growth of Precision Air and that they were carrying now more traffic than ATC ever did before.